Volatile oil prices are virtually impossible to predict, analysts say

Volatile oil prices are virtually impossible to predict, analysts say

After closing the previous session at $70.98 a barrel on Thursday, worldwide benchmark Brent crude gained 0.2% to trade at $71.12 per barrel at 0630 GMT. The price action, however, suggests the selling may have been fueled by technical factors.

Saudi output dropped to its lowest in over two years, boosting compliance with supply cuts to 153 percent, according to IEA estimates.

Brent crude oil futures rose 72 cents, or 1.02 percent, to settle at $71.55 a barrel.

Oil prices rallied more than 1 percent on Friday, with sentiment supported by OPEC-led supply cuts, escalating fighting in Libya and USA sanctions on petroleum exporters Iran and Venezuela. OPEC has been saying the curbs must remain, but that stance is now softening.

In December, OPEC and other major oil producers, including Russian Federation, pledged to cut production by 1.2 million barrels per day in order to prop up prices, effective from this January. This was more than enough to offset the crude oil build.

The oil cartel and its allies will meet in June to decide whether to continue withholding supply.

However, President Vladimir Putin seemingly softened that stance.

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Warns demand fell in developed OECD countries by 0.3 million bpd.

In 2018 OPEC+ made a decision to increase output at its mid-year meeting, only to return to production cuts in 2019.

Global oil supply dropped by 340,000 barrels per day (b/d) in March to 99.2 million b/d, as the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC cuts deepened and Venezuelan output fell sharply, according to data from the International Energy Agency (IEA) on Thursday.

Adding to the impact of the involuntary declines, top exporter Saudi Arabia has cut production by more than it agreed under the global pact.

But Putin, who's Russia's ultimate dealmaker, said he wasn't decided yet on how Moscow's cooperation with OPEC should go.

Russian Federation and OPEC may decide to boost production to fight for market share with the United States but this would push oil prices as low as $40 per barrel, TASS news agency сited Russia's Finance Minister Anton Siluanov as saying on Saturday.

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